|Shares Out. (in M):||25||P/E||8||6.7|
|Market Cap (in $M):||354||P/FCF||0||0|
|Net Debt (in $M):||392||EBIT||0||0|
NOA was last written up on VIC in the summer of 2017, and, while it has been an excellent performer since then, I think it warrants another look. Down around 20% from recent highs achieved in September, and flat over the last year, I believe the stock is very interesting today. The company made a series of transformative acquisitions in late 2018, has already de-levered following these deals, will generate significant FCF in the second half of 2019 after a capex-intensive 1H, will generate even more FCF in FY 2020 (a ~20% yield on the equity), and will likely resume their buyback in size in 2020, after pausing it for the most part this year (again, due to maintenance capex requirements following the acquisitions of 2018). (Note: the share price refers to NOA.TO traded in Canada, and all $ metrics in this write-up are in C$ unless otherwise noted, as the company reports in C$. The stock also trades under NOA on the NYSE.)
As the company describes itself, “North American Construction Group is one of Canada’s largest providers of heavy construction and mining services. For more than 60 years, NACG has provided services to large oil, natural gas and resource companies.” Though this simplifies it too much, a big part of what the company does is move earth around in big trucks. They own and provide the equipment to their customers, but also schedule and operate it. NOA owns over 600 assets (rigid frame trucks, loading units, dozers, and 20+ recently acquired ultra-class trucks).
Major customers include the Oil Sands companies (Suncor, Syncrude, Canadian Natural Resources), as well as mining conglomerates like Teck Resources, Rio Tinto, Newmont, Ivanhoe, and various government entities.